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Avoiding Environmental Remediation Through “Temporary” Closure

Avoiding Environmental Remediation Through “Temporary” Closure. Lucija Muehlenbachs University of Maryland. Alberta: 350,273 oil and gas wells 42,000 are inactive Texas: 354,616 oil and gas wells 114,259 of which are “shut-in, depleted and are not expected

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Avoiding Environmental Remediation Through “Temporary” Closure

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  1. Avoiding Environmental Remediation Through “Temporary” Closure Lucija Muehlenbachs University of Maryland

  2. Alberta: 350,273 oil and gas wells 42,000 are inactive Texas: 354,616 oil and gas wells 114,259 of which are “shut-in, depleted and are not expected to produce another barrel of oil”

  3. Environmental Impacts Gas migration Drinking water contamination Naturally Occurring Radioactive Material

  4. Real Options in Natural Resources Brennan and Schwartz (1985) Paddock, Siegel and Smith (1988) Dixit and Pindyck (1994) Slade (2001) Mason (2001) Moll (2001) Moel and Tufano (2002)

  5. Option to Reactivate

  6. Option to Abandon Option to Reactivate

  7. Maintenance Cost Option to Abandon Option to Reactivate

  8. Value of Abandoning Or Mothballing

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